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SETTING A FINANCIAL PENALTY
PENALTY MODULATED ACCORDING TO THE SERIOUSNESS OF THE BREACH
AND THE ADVANTAGES OR PROFITS GAINED, WITHIN THE LIMITS SET BY
ARTICLE L621-15 OF THE MONETARY AND FINANCIAL CODE1
WHAT ARE THE LIMITS SET BY LAW AND REGULATION?
WHAT FACTORS DOES THE ENFORCEMENT COMMITTEE CONSIDER IN MODULATING THE AMOUNT OF THE
PENALTY?
SELECTED EXAMPLES OF CIRCUMSTANCES AND SANCTIONS
HIGHEST FINANCIAL PENALTIES IMPOSED SINCE 2003 *
Note : The amount of a financial penalty is set by the Enforcement Committee. The AMF Board (i.e. the
prosecuting authority) and the rapporteur may put forward their own proposals.
WHAT ARE THE LIMITS SET BY LAW AND REGULATION?
The limits set by law and regulation vary with the category of the person or entity being sanctioned:
For professionals (as defined in Article L621-9 II of the Monetary and Financial Code, points
1°-8°, 11°, 12° and 15°) such as authorised investment services providers, investment funds and their
management companies, etc., regardless of the nature of the infringement (see AMF, 5 February
2009):
– The maximum financial penalty is EUR 100 million2 or ten times any profits made.3
For individuals acting under the authority or on behalf of such professionals such as
managers, compliance officers, salespersons, investment managers, investment analysts, traders, etc.:
– in cases of price manipulation, dissemination of false information or breaches of insider dealing
regulations, the maximum penalty is EUR 15 million4 or ten times any profits made,
– in all other cases, the maximum amount is EUR 300,000 or five times any profits made.5
1
Note: All the Enforcement Committee decisions cited in this factsheet are available in the Sanctions area of the AMF website. Hypertext
links point to the codes, laws and appeals court rulings cited in this factsheet, available on the www.legifrance.com website.
2
Since the Banking and Financial Regulation Act (2010-1249) of 22 October 2010.
3
Monetary and Financial Code, Article L621-15 III a
4
Since the Banking and Financial Regulation Act (2010-1249) of 22 October 2010.
5
Monetary and Financial Code, Article L621-15 III b
Posted online 18 October 2010
Updated 2 November 2010 1
For other persons, such as issuers, managers of an issuer, statutory auditors, etc., the maximum
penalty is EUR 100 million or ten times any profits made.6
The EUR 15 million and EUR 100 million ceilings apply to breaches committed after 24 October
2010, when Banking and Financial Regulation Act (notably Article 6) came into force.
Ceilings applicable to breaches committed after the Banking and Financial Regulation Act of 22 October 2010
came into force.
Breach of professional Attempted or actual insider
obligations imposed by law, dealing, price manipulation,
the AMF General Regulation or dissemination of false
approved professional rules information, or any other
offence that could impair
investor protection
Professionals EUR 100 million or ten times EUR 100 million or ten times any
any profits made, and/or profits made, and/or disciplinary
disciplinary sanctions (*) sanctions
Individuals under their EUR 300,000 or five times any EUR 15 million or ten times any
authority profits made, and/or disciplinary profits made, and/or disciplinary
sanctions sanctions
Other persons: issuer,
managers of the
issuer, statutory EUR 100 million or ten times any
auditor, any other profits made
person
Ceilings applicable to breaches committed between 6 August 2008 (effective date of Article 160 of the
Modernisation of the Economy Act of 4 August 2008) and 24 October 2010 (effective date of the Banking and
Financial Regulation Act of 22 October 2010).
6
Monetary and Financial Code, Article L621-15 III c
Posted online 18 October 2010 2
Updated 6 January 2011
Breach of professional Committing or attempting to commit
obligations imposed by law, insider dealing, price
the AMF General Regulation or manipulation or disseminating
approved professional rules misleading information, or any
other breach that would impair
investor protection
Professionals EUR 10 million or ten times any
EUR 10 million or ten times any
profits made, and/or disciplinary
profits made, and/or disciplinary
sanctions (*)
sanctions (*)
Individuals under their EUR 300,000 or five times any EUR 1.5 million or ten times any
authority profits made, and/or disciplinary profits made, and/or disciplinary
sanctions sanctions
Other persons: issuer,
senior executive of the
issuer, statutory EUR 10 million or ten times any
auditor, any other profits made (*)
person
(*) EUR 1.5 million for breaches committed before 6 August 2008 (and after the effective date of the Financial Security
Act of 2 August 2003).
REMINDER
In respect of a professional or any person acting under its authority or on its behalf, the Enforcement Committee, in
addition to or in lieu of imposing a pecuniary sanction, can also issue :
< a reprimand,
< a warning,
< a temporary or permanent ban on doing business in some or all of the services provided.
In respect of such person, the Committee can also revoke the person's professional licence (as investment services
supervisor, for example) on a temporary or permanent basis.
Posted online 18 October 2010 3
Updated 6 January 2011
WHAT FACTORS DOES THE ENFORCEMENT COMMITTEE CONSIDER IN
MODULATING THE AMOUNT OF THE PENALTY?
Aggravating factors such as:
– multiple breaches (e.g. AMF, 6 December 2007)
– repeated breaches (e.g. AMF, 1 March 2007)
– the nature of the professional service involved (e.g. business introducer AMF, 4 December 2008;
analyst, AMF, 12 November 2009)
– the market impact of the breach (e.g. seriousness of a settlement failure, owing to its impact on the
orderly operation and integrity of the market, AMF, 4 September 2008)
– the magnitude of the harm suffered by investors (e.g. AMF, 26 October 2006)
– the magnitude of the profits or advantages gained
– the market importance of the information concealed or disclosed (e.g. AMF, 4 December 2008)
Mitigating circumstances such as:
– the financial situation of the respondent (e.g. company in economic difficulties or court-ordered
restructuring, (e.g. AMF, 1 March 2009; AMF, 15 October 2009)
– the personal situation of the respondent (e.g. unemployed, AMF, 5 March 2009)
– young age or inexperience of the respondent (e.g. AMF, 16 November 2006; AMF, 4 September
2008)
– the efforts made by the respondent after the breaches took place (e.g. measures taken to prevent
further breaches, AMF, 5 October 2006; measures taken by the company to compensate customers, AMF, 18
June 2009)
– the recent nature of the disregarded rules (e.g. rules on disclosure obligations of senior executives
AMF, 1 October 2009) or rules whose reach might not have been clear (e.g. rule on settlement periods for
financial instruments, AMF, 27 November 2008)
Some factors are accorded no weight in setting the penalty
For example the circumstantial fact, with no impact on the continuity of the legal entity involved, that the
principal senior executives of the company were changed subsequent to the alleged infringements
cannot be taken into account in determining the amount of the penalty (AMF, 1 October 2009).
All previous decisions on this topic are available in the table of case decisions in the annual book of
Enforcement Committee and appeals courts decisions. A consolidated version of the table for the
period 2007-2009 can be accessed on the AMF website (the decision books for 2007 and 2008 are
also available online).
Posted online 18 October 2010 4
Updated 6 January 2011
SELECTED EXAMPLES OF CIRCUMSTANCES AND SANCTIONS
A senior manager had disseminated inaccurate and misleading information to the public by stating
crude oil reserves that did not ultimately belong to the company, and at an abnormally low price per
barrel. The Enforcement Committee imposed a penalty of EUR 200,000 because the breach was
particularly serious. The amount of oil reserves and the cost per barrel are key items of financial
disclosure for companies in this sector (AMF, 4 December 2008).
A senior manager had used inside information on his company's revenue and estimated operating
profit, and then later other inside information relating to its consolidated financial statements.
The Enforcement Committee imposed a financial penalty of EUR 450,000 for a breach of regulations
on insider dealing. The committee took into account both the particular gravity of a chief executive
using inside information on the company he runs and the gains he realised by doing so, which
were valued in the complaint at an uncontested amount of EUR 165,363 (AMF, 23 October 2008).
A management company had failed to meet its minimum capital requirement pursuant to Article
322-8 of the AMF General Regulation and had allowed its regulatory capital to remain negative for
several months. The senior manager had not taken appropriate steps to alert either the AMF or the
company's shareholders. The Enforcement Committee imposed a penalty of EUR 15,000 on the
company and a penalty of the same amount on the senior manager.
In assessing the seriousness of the case, the Committee noted that, for the company, the breach had
persisted over an extended period, whereas for the senior manager, the breach could be held
against him only up to the date on which he ceased to hold office. For the company, the committee
also took into account the fact that the breach had had no consequences on the interests of the
company's customers and the company had taken steps to remedy the situation (AMF, 24 April
2008).
Posted online 18 October 2010 5
Updated 6 January 2011
HIGHEST FINANCIAL PENALTIES IMPOSED SINCE 2003 *
Date of the decision Type of breach Amount of the penalty Individual or legal entity
AMF, 9 March 2006 Price manipulation €7,114,668 Legal entity
AMF, 20 November 2008 ** Insider dealing €5,000,000 Individual
AMF, 8 January 2009 Insider dealing €2,500,000 Individual
AMF, 9 March 2006 Price manipulation €1,770,480 Individual
Breach of public
AMF, 29 March 2007 disclosure requirements €1,500,000 Legal entity
AMF, 7 June 2007 Insider dealing €1,500,000 Legal entity
Insider dealing and
AMF, 4 December 2008 breach of public €1,500,000 Individual
disclosure requirements
AMF, 23 December 2008 Insider dealing €1,500,000 Individual
AMF, 8 January 2009 Insider dealing €1,500,000 Legal entity (3)
Insider dealing and
AMF, 17 December 2009 breaches of public €1,500,000 Individual
disclosure requirements
AMF, 23 December 2008 Insider dealing €1,300,000 Individual
AMF, 6 December 2007 Insider dealing €1,200,000 Individual
AMF, 23 November 2006 Insider dealing €1,200,000 Legal entity
* All these decisions concern breaches committed before the Act of 4 August 2008 came into force (see first and second
pages of this factsheet).
** By order dated 24 november 2009, the Paris Court of Appeal reduced the penalty to EUR 3 million.
Posted online 18 October 2010 6
Updated 6 January 2011
